A korrentour reading

Central bank purchases of government bonds are not bailouts and do not automatically cause inflation, since they only change the composition of the consolidated government's liabilities, not their total.

What is a korrent?

A korrent — “current”, with a K — is our reading of what someone said: one sentence, drawn from their own words below. People put the same thought in different words; a korrent tries to name the thought they share, so that what several people mean can be set side by side, and followed as it changes.

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What Olivier Blanchard actually said

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OB
Olivier Blanchard 1 Jun 2022

Governments have not been bailed out by their central banks. As I discussed earlier, central bank intervention does not reduce the overall liabilities of the consolidated government, just their composition. And it does not automatically lead to more inflation: It increases the size of the balance sheet of the central bank, but it does not increase the size of the non-interest-paying money stock.

↗Fiscal Policy under Low Interest Ratesdirect.mit.edu

First recorded here 1 Jun 2022 · How quotes work

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